Investment-Banking Relationships: 1933-2007

Morrison, Alan, Schenone, Carole, Thegeya, Aaron and Wilhelm, William (2018) Investment-Banking Relationships: 1933-2007. Review of Corporate Finance Studies, 7 (2). pp. 194-244.

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Abstract

We study the evolution of investment-banking relationships from 1933 to 2007. Relationship exclusivity and client concerns for the state of their banking relationships were strong through the first part of our sample period but then entered a period of sharp decline beginning around 1970. We interpret the bank-client relationship as an informal governance mechanism for curbing opportunistic behavior in a weak contracting environment and examine how technological change aggravated conflicts of interest within investment banks and between banks and their clients. This perspective sheds light on why trust between banks and their clients now appears to be in short supply.

Item Type: Article
Keywords: Investment Banking, Securities Issuance, Underwriting Syndicates, finance
Subject(s): Finance
Date Deposited: 04 Jul 2018 09:31
Last Modified: 04 Oct 2018 10:56
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6856

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